Question

Consider a bond that promises to pay $100 in one year.
a. What is the interest rate on the bond if its price today is $75?
$85? $95?
b. What is the relation between the price of the bond and the
interest rate?
c. If the interest rate is 8%, what is the price of the bond
today?
d. How does the demand for bonds vary with the price of bonds?
Comment.